Diluted earnings per share (EPS) totaled $2.83, up 1 percent from $2.79 a year ago.

Adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled $2.82. This was up 4 percent from $2.72 a year ago (please see Note 11 ).

General Mills Chairman and Chief Executive Officer Ken Powell said, “Our plans for 2014 called for sales and earnings growth consistent with our long-term business model, along with increased cash returns to shareholders. We made good progress building our worldwide food businesses, and we returned more than $2.7 billion in cash to shareholders through a 17 percent dividend increase and significant share repurchase activity. But our sales and operating profit results were disappointing. In the fourth quarter, promotional spending in developed markets was less effective than we planned and input cost inflation was a bit above our forecast. Net sales and adjusted gross margin fell short of our targets.”

U.S. Retail Segment resultsFiscal 2014 net sales for General Mills’ U.S. Retail operations essentially matched year-ago results at $10.6 billion. Pound volume also was essentially even with last year’s level. The Snacks, Small Planet Foods and Big G cereal divisions led U.S. Retail sales performance for the year. New products launched during 2014 contributed more than 5 percent of annual U.S. Retail shipment volume. Advertising and media expense was 1 percent below last year’s level, while other consumer marketing spending increased 1 percent. U.S. Retail operating profit declined 3 percent to $2.3 billion.

Corporate itemsUnallocated corporate expense totaled $196 million in 2014, compared to $326 million in 2013. Excluding the effects of changes in mark-to-market valuation of certain commodity positions, unallocated corporate expense equaled $245 million this year compared to $330 million in 2013.

Restructuring, impairment and other exit costs totaled $4 million in 2014 compared to $20 million in 2013. Net interest expense in 2014 totaled $302 million, down 5 percent from the prior-year level due to changes in debt mix and rates. The effective tax rate for 2014 was 33.3 percent. Excluding certain items affecting comparability of results, the effective tax rate was 32.2 percent in 2014, compared to 32.3 percent in fiscal 2013. For the fourth quarter, the effective tax rate excluding items affecting comparability was 29.7 percent in 2014 compared to 34.7 percent last year (please see Note 11 for reconciliation of these non-GAAP measures).

Cash Flow itemsCash provided by operating activities totaled $2.5 billion in 2014, down from the previous year primarily reflecting cash flow effects from changes in current assets and liabilities. Capital investments totaled $664 million, including growth capacity for Greek yogurt and grain snacks. Dividends paid increased to $983 million. General Mills repurchased approximately 36 million shares of common stock in 2014 for a total of $1.7 billion. Average diluted shares outstanding declined 3 percent in 2014 to 646 million. Fourth-quarter average diluted shares outstanding declined 5 percent to 632 million.

Outlook for 2015“Our Number One objective in the new fiscal year is to accelerate our topline growth,” Powell said. “Our fiscal 2015 plans include a strong new-product lineup, compelling news or renovation on many existing brands, and a full slate of consumer-focused marketing initiatives. In addition, supply chain cost-savings from our ongoing Holistic Margin Management (HMM) program are expected to exceed $400 million in 2015. We anticipate these savings will offset input cost inflation, which we estimate at 3 percent for the new year.

“Beyond HMM, we have started work on several new cost-reduction initiatives designed to boost our efficiency and sharpen business focus behind our key growth strategies,” Powell noted.

General Mills said it has begun a formal review of its North American manufacturing and distribution network with the goals of streamlining operations and identifying potential capacity reductions. The company also has initiated efforts focused on further reducing overhead costs. Together, the new cost-reduction initiatives are targeted to generate savings of $40 million pretax in fiscal 2015, with additional savings expected in fiscal 2016. The company plans to announce further details in the coming months as specific actions are determined.

General Mills fiscal 2015 net sales are expected to grow at a mid single-digit rate in constant currency, including the contribution of a 53rd week in the fiscal period. Adjusted segment operating profit also is expected to grow at a mid single-digit rate in constant currency. Benefit of the extra fiscal week will be reinvested to support increased advertising and digital media initiatives, along with project expenses related to several key fiscal 2016 product launches. Adjusted diluted EPS is expected to grow at a high single digit rate in constant currency. At current exchange rates, the company estimates a 3-cent headwind from currency translation in 2015.

General Mills will hold a briefing for investors today, June 25, 2014, beginning at 8:30 a.m. Eastern time. You may access the web cast here.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and assumptions. These forward-looking statements, including the statements under the caption “Outlook for 2015,” and statements made by Mr. Powell, are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future net sales and earnings could be affected by a variety of factors, including: competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including labeling and advertising regulations and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of significant accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, and energy; disruptions or inefficiencies in the supply chain; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war. The company undertakes no obligation to publicly revise any forward-looking statement to reflect any future events or circumstances.